External Industry Analysis in the Automotive Industry

Detroit, Michigan grew up around the automobile industry. At its peak, Detroit was the fifth-largest city in the United States, becoming the home to over 1.8 million people by 1950 (Davey, Monica 2013). The prolific population was due greatly to the success of the auto industry in the city. At that time, Detroit was flying high, its name coined “The Motor City” (americaslibrary.gov), and automobiles greatly impacted commercialization. From transporting goods to hastening production, to selling parts, to manufacturing and selling new automobiles, the auto industry completely transformed Detroit. Things seemed

The monopolistic rivalry business structure incorporates numerous organizations offering somewhat separated items. There is a simple passage into the business sector by new firms over the long haul, and the organizations are sufficiently extensive to impact the aggregate supply. There are likewise various measurements of rivalry, including dissemination outlets, promoting, and item characteristics. The peripheral expense will be not exactly the cost at its benefit amplifying yield level. As indicated by the content, a monopolistic contender can't make long-run benefit (Colander, 2013).

In general, the level of competition in an industry increases with the number of firms in the industry. If all firms in an industry are small in size, relative to the size of the industry, it is a fragmented industry. If a small number of firms controls a large share of the industry’s output or sales, it is a consolidated industry.

The majority of products offered by industry members are commodities and are weakly differentiated which increases rivalry.

General Motors was once a back bone of American economy. It was one of those organizations who were the driving force of American automotive industry single handedly. But like any other enterprise, it has its strengths and weaknesses. Global presence with an impeccable distribution system which ensures a highest reach out couple with strong research and development gives it a competitive edge over its rivals however it has also borne its share of trouble mainly caused by recession. But now that market is picking up again, GM is also showing steady growth.

An oligopoly is the system this country needs. Since there are only a select few companies manufacturing a good there still is room for lower prices. But also there is inspiration for innovation. These companies consider their competitor’s actions when prices change and are required to follow to keep their share of the market. Automobile manufacturers are perfect examples of an oligopoly. The price for manufacturing is high, yet there is a specific standard and desire to innovate and come up with the best product on the market.

Being too competitive will end up in an argument or distrust between companies. A result of competition is rushed products. Take Apple for example. Apple is a technology company that sells their breaking point product, the iPhone. Consumers will just buy and buy. This is an example of a poor outcome of competition is that it is rushed. Every year the iPhone gets released and nothing much has changed. However, for some reason the public will still buy these products. An unacceptable issue with competition is that it will force companies to make their own product quicker to satisfy consumers. Therefore, companies have to rush their products in result of other companies pushing them, which may result in faulty

Existing Competitors. Rivalry among competitors within an industry use price discounting, new products, marketing, and other techniques to be competitive. Profitability of an industry suffers from high rivalry. The intensity with which companies compete and the basis on which they compete determine to which degree rivalry brings down an industry’s profitability (Porter, 2008). Pure competition is considered by economists as a competition with a high

•Monopolistic competition- When an industry contains many rival firms, each of which has a comparable but at least slightly different product. Restaurants, are an example, all serve food but of different types of food and in different sites. Manufacture costs are above what could be attained if firms sold equal products, but consumers have an advantage from the variety.

Industry Competitors. Competitors can become a major threat to a business’ success. What differentiates Uber from its competitors is its global presence and the variety of services. Even though Uber is seen as a transport service, the effortless service has attracted a market segment that appreciates a digital customer experience. Uber’s primary competitors are Lyft and Ola Cabs, as well as the public transportation. With companies adapting to a technological society many have alternated to mobile applications, which may cause intense competition for Uber. Competition with

Autotech company is an automotive manufacturing and supply company. It has started its business as a family business. Nowadays it is one of the fast growing automotive companies. Currently it is facing complex operation of its business as it keeps all records such as billing, inventory, personnel, customers, products, stock, financial etc. in hard copy format such as files, note, books etc. It is very tough to maintain files, papers, notes manually for an extensive time, which is time consuming, costly as well not accurate as paper work is required more time and their maintenance cost is more than soft copy storage and maintenance. As per my point of view, Autotech needs to develop Information Systems in its business to make easy and

Businesses are not only faced with competition within the industry they operate in. They also face competition from businesses in other industries.

A second point of consideration relating to the intensity of rivalry within the industry was the level of industry demand. “Demand declines when customers are leaving the marketplace or each customer is buying less” (Hill &Jones, 2012, p. 62). This was the case in 2009 in many developed nations due to the recession, which was marked by job loss, credit problems, and high gas prices that increased the demand for fuel-efficient vehicles or left consumers unable to purchase vehicles altogether. At the same time, growth was expanding in China and some other developing nations, which opened the doors for automobile companies in these countries to expand at home and

When a good or service has only a limited number of sellers and offers the product with little attention to the competition, this is known as an oligopoly. An oligopoly is different than a monopoly because there are multiple firms that are involved; however, the consumer can be affected in the same way. Competition can usually be seen as what’s best for the customer; however, that’s not always the case for the firm. If we observe two firms that have the leading sales in soda, Pepsi Cola and Coca-Cola, we can see how they form a great example of oligopoly. As the information provides, we can see that these two drink companies share about half of the soft drink market.

Competition among the Contenders is high. Considering that the car business speaks to an oligopoly (particularly in United States) the consistent rivalry for the piece of the pie and industry predominance is predominant. Constantly expanding rivalry is energized by the higher purchaser desires and expectation at the lower costs.